What is the ruling on one who lends his brother a loan for an unspecified period, on the condition that the borrower pays the lender one hundred riyals, or more or less, of the merchandise every day?
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The questioner : What is your opinion of one who lends his brother a loan for an unspecified period, on the condition that the borrower pays the lender one hundred riyals, or more or less, of the merchandise in which he trades? What is the ruling on that? May Allah open the way for us and for you.
The Shaykh : The ruling is that this is a defective condition, and it is not permissible for the lender to gain anything from this loan, whether money, a tangible item, a benefit, or a lease, or anything at all. This is because a loan is pure benevolence. If exchange and competition enter into it, it becomes a sale, and it becomes riba (usury or interest).
For example: if I give you ten riyals as a loan, ten riyals are established in your liability, and you pay them to him whenever it becomes easy for you. If this were a sale, it would not be valid. If he said, "I sold you ten riyals for ten riyals," and the mutual possession did not take place, it would be a defective sale. But because lending is benevolence, and benevolence is sought, and the benefit of this benevolence is the opposite of what the usurers want, the Shari'ah (Islamic sacred law) made it permissible for you to lend ten and for him to give you ten. If you condition upon him that he give you twelve for ten, this becomes an exchange and a barter, and it enters the category of sales, so it becomes riba (usury or interest). For this reason, the scholars (may Allah have mercy on them) mentioned a useful principle in this matter and said: "Every loan that brings a benefit is riba".
The questioner : May Allah bless you.
The Shaykh : The ruling is that this is a defective condition, and it is not permissible for the lender to gain anything from this loan, whether money, a tangible item, a benefit, or a lease, or anything at all. This is because a loan is pure benevolence. If exchange and competition enter into it, it becomes a sale, and it becomes riba (usury or interest).
For example: if I give you ten riyals as a loan, ten riyals are established in your liability, and you pay them to him whenever it becomes easy for you. If this were a sale, it would not be valid. If he said, "I sold you ten riyals for ten riyals," and the mutual possession did not take place, it would be a defective sale. But because lending is benevolence, and benevolence is sought, and the benefit of this benevolence is the opposite of what the usurers want, the Shari'ah (Islamic sacred law) made it permissible for you to lend ten and for him to give you ten. If you condition upon him that he give you twelve for ten, this becomes an exchange and a barter, and it enters the category of sales, so it becomes riba (usury or interest). For this reason, the scholars (may Allah have mercy on them) mentioned a useful principle in this matter and said: "Every loan that brings a benefit is riba".
The questioner : May Allah bless you.